Capital Markets

Bourse sheds Sh24.4 billion investor wealth in January

nse (2)

Nairobi Securities Exchange trading floor. FILE PHOTO | NMG

The Nairobi Securities Exchange (NSE) lost Sh24.45 billion in investor wealth in January, reflecting the impact of Safaricom’s stock concentration on the bourse's total valuation as compared to other companies.

NSE market capitalisation closed at Sh1.961 trillion on Tuesday, down from Sh1.986 trillion at the start of the year.

The decline in wealth in the first trading month of the year continues the multi-year bearish trend despite expectations of dividends and higher earnings as blue-chip firms announce their full-year results.

Safaricom is expected to announce an interim dividend in the coming days. Banks are also set to announce dividends on the back of record earnings for the year ended December.

Read: What Absa market index says about bourse

January market performance coincided with Safaricom shedding Sh30.04 billion, with the impact mitigated by banking stocks and other large firms whose investors’ wealth rose.

Equity for instance has gained Sh1.89 billion since the start of the year to trade at Sh44 from Sh44.5 while EABL gained Sh6.92 billion with a share price of Sh176.25, 5.2 percent up from Sh167.5 at the start of the year.

StanChart gained Sh5.48 billion while Stanbic Holdings gained Sh3.16 billion.

NCBA Group has lost Sh5.68 billion slowing down from a rally recorded last year that saw the stock’s share jump 57.94 percent in 2022 to be among the best stocks at the NSE.

Safaricom’s share price has been falling since last year after hitting highs of above the Sh40 mark, trading at Sh23.4, valuing the firm at Sh937.53 billion on Tuesday which is equivalent to 47.8 percent of the total market capitalisation of all 65 listed firms.

Read: Weed out worthless firms listed on Nairobi bourse

The NSE recorded a massive drop in investors’ wealth last year attributed to the aggressive adjustment of interest rates by advanced markets such as the US to keep abreast of soaring leading to dollar strength.

The rise in rates on hard currency assets offered better returns at relatively lower risk compared to emerging and frontier markets like Kenya which saw a rise in foreign investor exits.

[email protected]